HOUSTON (CN) – Stanford Financial Group’s former Chief Investment Officer Laura Pendergest-Holt demands that Lloyd’s of London cover her defense against an SEC lawsuit. Pendergest-Holt claims that while she worked for Robert Allen Stanford – who faces federal charges in an alleged $6 billion Ponzi scheme – she was covered under Lloyd’s Financial Institutions Crime and Professional Indemnity Policy.
The SEC raided the Stanford Group’s Houston headquarters in February, effectively shutting it down. Pendergest-Holt was arrested and charged with obstruction.
In her federal complaint, Pendergest-Holt says Lloyd’s owes her defense costs from this criminal complaint, for two civil class actions, and for the SEC’s civil complaint.
Lloyd’s initially agreed to advance defense costs to Pendergest-Holt, but when a court-appointed receiver took control of the Stanford Group’s assets for its shareholders, they had to wait until a judge ruled on whether the Stanford entities were entitled to insurance proceeds, she says.
She says that though the judge subsequently ruled that the “insurance policies were not an asset of the Stanford Companies and the Underwriters were free to make payments as promised,” Lloyd’s wrongfully declined to cover her legal fees for charges made against her after Aug. 27.
She wants an injunction forcing Lloyd’s to start paying her legal fees in the SEC litigation and the criminal charges against her.
She also seeks exemplary damages for gross negligence, malice and fraud.
She is represented by Dean Blumrosen.